Later this week, President Trump is scheduled to meet President Xi Jinping on the sidelines of the G20 summit at Osaka, Japan. However, auto investors don’t seem to be very excited or hopeful about the meeting. So far this week, most auto companies have largely traded on a mixed to slightly negative note.
As of June 26, Ford Motor Company (F), Fiat Chrysler Automobiles (FCAU), Tesla (TSLA), and Harley-Davidson (HOG) fell 0.8%, 0.6%, 1.2%, and 2.6%, respectively. NIO (NIO) has seen a 3.4% value erosion in the first three days of this week.
General Motors (GM) is the only auto company that has risen this week. Recently, General Motors announced its plan to invest $20 million into its Arlington Assembly plant in Texas, which helped its stock rise.
Trade war might continue
On June 25, JPMorgan Chase CEO Jamie Dimon told Yahoo Finance that “the best you can expect is that they have a good meeting, that they start renegotiating, that the tariffs are off for now, and give the teams a chance to negotiate a deal.” He doesn’t expect “a quick resolution” to the US-China trade war.
Auto companies, including Ford, General Motors, and Tesla, are already paying heavy tariffs to China, which might continue to hurt their business until the countries reach a trade deal.
While the US-China meeting might not result in a trade deal, it could keep trade tensions from rising more.
As investors continue to watch updates related to the meeting, auto stocks will likely remain highly volatile in the next few sessions.
In June, General Motors, Ford, Fiat Chrysler, Tesla, and Harley-Davidson have risen 14.4%, 4.1%, 9.4%, 18.4%, and 9.0%, respectively. In contrast, NIO has lost 16.4% in June.